Fintech Spotlight: Art Investing + Fintech = Arthena

In this week's Fintech Spotlight we take a look at Arthena and how their platform is using crowdfunding to make

In the past, Finance Magnates has covered the emerging art investment industry. Assisting its growth has been a proliferation of information available online as well as online marketplaces for the sale and purchase of fine art. But, sourcing those rare and in-demand pieces of art are nearly always beyond the means of many wealthier investors.

Providing a platform to make art investing more attainable for average investors is Arthena. Launched in April of this year, Arthena is a crowdfunding platform where accredited investors can pool investments of as little as $2500 to purchase more expensive pieces of art.

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Combining crowdfunding and art investing, Arthena is one of a growing group of fintech firms that are creating more economical ways for investors to diverse their portfolios beyond the typical assets of stocks and bonds. Beyond art, other assets that now can be accessed through crowdfunded pools with investment sizes in the $5000 or less range compared to greater than $100,000 include real estate, equity in technology startups and loans of all types such as towards small businesses, students or home improvement.

When it comes to artwork, beyond the prestige of owning a rate piece of art, the attraction of the asset class of late has been its market beating returns. Second to only rare car investing, art was an outperformer for the ten year period ending in 2014 according to the Knight Frank Luxury Index Report.

 Knight Frank’s Luxury Index Report 2014
Source: Knight Frank’s Luxury Index Report 2014

However, finding those pieces that are destined to appreciate isn’t always an easy endeavor. At Arthena, the platform works with art experts who cover certain niches such as modern or European artists. The experts review and source potential purchases for Arthena’s investors and create larger artwork collections for investors to participate and own a portion of.

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Investors are given access to top art experts and can learn about their strategy and expertise

According to Arthena’s Founder, Madelaine D’Angelo, for investors new to art, the addition of experts helps them become acquainted with overall art investing. She explained that “Investors are given access to top art experts and can learn about their strategy and expertise. From there, investors can choose who they want to invest with.”

According to Arthena, another advantage of partnering with experts in the fields, is that the platform is able to gain access to artwork that isn’t easily found by the larger public. In this regard, Arthena’s model can be considered similar to syndicate investing on AngelList, where investors equity crowdfund alongside seasoned angel investors, accessing their proprietary deal flow.

Currently, artwork focused on by the platform is of the Post-War/ Contemporary market. D’Angelo, explained to Finance Magnates that this is the case as this market of artwork “has experienced the highest growth over the past decade”. D’Angelo added that the average value of individual pieces in collections are $50,000.

After creating a collection, Arthena expects to have a five to seven year holding period before selling individual pieces of art and returning capital to investors. During this time investors have access to an online dashboard that itemizes their artwork collection and provides updates in its value.  Overall, the dashboard represents how another way how art investing is becoming digitalized and evolving to be similar to investments in other asset classes.

Fintech Spotlight is a new column on Finance Magnates devoted to reviewing innovative financial technology companies and sector trends.

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